Agenda item

This report provides an overview of the whole Capital programme in Brent, current performance and an update on the Investment Strategy.

Althea Loderick (Strategic Director of Resources) introduced the report to the committee which provided an overview of the whole Capital programme in Brent, detailed current performance and gave an update on the Investment Strategy. The Committee was asked to the note the budget for the Capital Programme for 2016/17 of £173.06m, the additional in-year budget growth of £12.18m, the four-year budget from 2016-2020 of £457.5m, and the forecast underspend of £72.53m for 2016/17. The report highlighted the key reasons for the expected underspend, which included over optimistic delivery planning, weak capital financial planning, legal planning and procurement issues. An action plan was being implemented to address the historic underperformance of the Capital Programme.

Members raised several queries in the subsequent discussion. Further details were sought regarding the Wholly Owned Investment Company established by the council and Temporary Accommodation (TA) Reform Plan, particularly the type of properties, the allocation process and expected length of occupation. Concerns were raised regarding the financial risk posed and information was sought on the impact on the budget of the additions to the capital programme detailed in the report.

Responding to Members’ queries, Conrad Hall (Chief Finance Officer) explained that the TA Reform Plan was approved by Cabinet in March 2016. It contained a number of measures to reduce reliance on and the costs of temporary accommodation, including the acquisition of a private rented sector (PRS) portfolio. By doing this, the Council was able, through its investment company, to act as a responsible landlord and deliver housing at lower cost than the private sector. The properties would be typical residential properties of a variety of sizes and to ensure that it was a viable offer, the tenants would be required to have secured employment within an hour and a half’s travel from Brent.  The council owned one hundred per cent of the investment company and bore the financial risk of the venture, though this was deemed reasonable and proportionate. Addressing concerns regarding the democratic accountability of the investment company, Conrad Hall emphasised that the Council had set out how the company was to be governed and any proposed action outside of this would require Cabinet approval. 

Members received an appraisal of the budgetary impact of additions to the Capital Programme, approved after the budget setting process. Conrad Hall confirmed that the impact was relatively long term. The anticipated savings from the New Accommodation Independent Living (NAIL) programme and TA Reform Plan would be achieved over and above those that were set out in the budget.  Whilst the 2016/17 underspend had helped to offset pressures, the council was keen to progress the schemes and realise the associated financial benefits.

Following a request for further information regarding the revenue budget, it was agreed that Conrad Hall would refer members to the appropriate cabinet report.

RESOLVED:

i)          That the following be noted:

a.    the budget for the Capital Programme for 2016/17 of £173.06m;

b.    the additional in-year budget growth of £12.18m;

c.    the four-year budget from 2016-2020 of £457.5m, and;

d.    the forecast underspend of £72.53m for 2016/17.

ii)         That the following reasons for the expected underspend this year be noted:

a.    over optimistic delivery planning;

b.    weak capital financial planning,

c.    legal, planning,  and;

d.    procurement issues.

iii)       that it be noted that an action plan was being implemented to address the historic underperformance of the Capital Programme, which would include refreshing the governance arrangements and a range of other measures;

iv)       that the progress made in implementing the Investment Strategy be noted.